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The 40-Year Slump - featuring an architect!

This article from the American Prospect talks about the change since 1974 that has led us to the dismal economic situation we are in now:

Between WW2 and 1974 ...The poorest fifth (of Americans) had seen their incomes increase by 42 percent since the end of the war, while the wealthiest fifth had seen their incomes rise by just 8 percent.

...no one could deny that Americans in 1974 lived lives of greater comfort and security than they had a quarter-century earlier. During that time, median family income more than doubled.

Then, it all stopped...1974 would mark a fundamental breakpoint in American economic history.

Since 2000, even as the economy has grown by 18 percent, the median income of households headed by people under 65 has declined by 12.4 percent.

This is a much larger and general conversation than we need to have on Archinect, but the reason I feel like posting it (besides the fact that the unfairness and bleakness of this issue occupies a huge chunk of my thought processes during any given moment) is because the article features stories of "workers in the age of anxiety" and the second story is of an LA architect!

I'll add my own story that exemplifies the point: My father's first full-time job using his professional degree in 1961 paid $18,000. My first full-time job using my professional degree in 1993 paid...$18,000. In 1961 the average house cost $20,000. In 1993, the average house cost one hundred thousand dollars more, $126,000. The numbers just don't work.

To everyone struggling like Alex in LA, remember: the economy sucks but it's not your fault. The promise of doing the right thing (education, work hard) is a non-working formula these days. It's not your fault you're barely making enough money to survive. The question is: do you feel motivated and empowered to try to change the course of the country? And what would you propose to do that?

In '73 the exchange rate for a troy ounce of gold was $42.22. In '76 the definition of the dollar was changed, to remove all reference to a gold equivalent. Today, a troy ounce is $1,273.00… What? So, if minimum wage in '73 was $1.60, then today in should be $48.24.

Well - our "lifestyle" expenses are much higher - we're paying for services that didn't exist in the 70s (cell phone, cable, internet, etc...), it costs more to own and operate a car (which will only get more expensive), and we're living in bigger and bigger homes that cost more to heat/cool, and we've created a low-density auto-centric sprawl that ends up costing us a lot more to maintain and move around in.

So... not only do we have a loss of wages, but the cost of living has gone up because we're living very inefficiently - which I think is helping to drive the "middle class" further down into the hole. Either we make fundamental changes to how we live, or we all start fighting for better wages and kick the can down the road.

However - as much as I can't stand Kunstler, I do think he's right that we're soon going to have to make a decision between burning fuel for personal transportation (which includes electric vehicles, since we have to create energy somehow) or using it for tangible goods. the cost of extraction is only going to go up - and even if pay becomes more equitable, only a tiny percentage of the population is going to be able to afford the kind of drive-everywhere lifestyle much of this country currently enjoys.

Anyway - we'll never go back to that era of cheap-oil prosperity (which, btw, is exactly the time frame in the article - with 1974 corresponding with the year oil production started dropping off in the US). We're now back to oil production that was at 1947 levels, but we're left with all this infrastructure that is meant for a future where we're still consuming oil at the same rates.

change is going to be hard, but it's coming sooner or later - so I guess the question for us architecture people is - is it going to be some weird nostalgic new urbanist fantasy-land, or is it going to be something else?

toast you raise good questions. In the 50s-70s people didn't drive much, right? And lived in denser communities OR very rurally? I feel like that physical form is what we're headed back to, as young and educated people tend to want to live in cities.

The suburbs are going to become the new ghettos, as people with any money at all head to the cities. Since the suburbs are impossible to navigate without a car, and since most suburban districts are currently run by anti-taxers so there won't be any transit, I predict a shadow transit system of private bus companies catering to the odd hours of service workers.

They already have in many places. Gentrification in NY is out of control. People are moving to LI and Queens suburbs because they cant afford the city. Its a complete reverse of what we saw in the 1950s.....The biggest problem with this imo, is that it becomes much harder to get out of suburban poverty than urban poverty because there are less resources in the surrounding community. In a city for instance, people can sell stuff on the street, walk to work, etc....In the suburbs people become isolated. Also, the city tends to be more economically heterogeneous with regard to socio-economic classes. Look at the village area in the late 70's and early 80's. Poor people and very rich people all mingling in the same area...or the garment district in the 1940's... Suburbs are soooo economically homogenous, and as they say, out of sight out of mind.

As for what to do...I think it all comes down to production. There is a clear correlation between this income gap and the trend of not producing stuff... Production is gone. In 1940 99% of all clothes were made in the US....Now only about 2%. Those jobs are gone. They were the bottom jobs, and once you remove the bottom brick the others fall down a tier until the jobs that were once on top of the stack are now on the bottom. I think this could be solved by having a specific minimum wage for specific jobs. Waiters may be 25k, welders may be 50k, etc....The wage should be based on the time and uniqueness needed to aquire the skill. Its insaine that we have the same minimum wage for Wal-Mart as we do for an architect. Its a sort of stabilization mechanism to ensure a healthy middle class based on how much school and training you put in. Also, the lowest wage on the scale should be raised to at least 15$ an hour. People complain about welfare, but if people could support themselves we wouldn't need it. The govt is forced to make up for big businesses (who can afford it) not paying workers a living wage.

At the same time, we really need to start making things again. I don't think this will ever happen on a mass "big production" scale, or even should ever happen like that. Things are much different now than in the 1940s, but I do think decentralized small "cottage industry" production would be great. Many people are already doing it, and with all the new technology like cnc fabricators laser cutters, etc, its very possible to make high quality stuff in a small place with a few people....local stuff.

Last, we need to reduce regulation on the small guy and increase it on the big guys. If people could have more freedom to open small businesses like food trucks without all the ridiculous regulation and ordinances then we would see a huge street industry. The public street should be open for the public to do business as it is in many places abroad. Instead, we see cities like NY "cracking down" on such businesses. Why should it be so hard to open a friggin hot dog cart. We also need to get rid of about 90% of these stupid pointless occupational licenses. Should a hair dresser really have to pay thousands of dollars to get a license? Its crazy. Americans need to stop being so afraid of everything and accept that life has risks. So what if you get the shits from eating sidewalk tacos. Live a little and stop being scared little pussies. So what if someone gets a shitty hair cut from a non-licensed barber. Come on! We also need a place for this stuff to happen, which is why the street should be designed to accomodate this public informal market place. As for the big fish...regulation on wallstreet, big agriculture, etc needs to be revamped. Small decentralized agriculture, energy production, fast food (like in Tokyo), and manufacturing can only happen if the big guys have to play by fair rules like not being allowed to use gmo's or outsource work to Chinese slave labor. If we level the playing field capitalism can work as it did in the past, but currently it is too imbalanced. People can never compete because their products are too cheap. So yeah the prices will go up, people will earn more, and the rich will get a little less rich. Don't hold your breath because they are the ones who make the laws and buy the politicians...So first is first, get money out of politics and overturn citizens united!

It's ironic that one of the undoubtedly most capitalist countries on the planet, Switzerland, appears to take wealth redistribution more serious than any other, with a slew of referendums (yes, they have actual democracy) aimed at decreasing income inequality. In March, one such referendum forced public companies to give shareholders a binding vote on executive compensation. In November, there's a vote on the 1:12 initiative, which stipulates that executives can't make more than 12 times the salary of the lowest-paid employee. Which somewhat perversely means executives have a very good reason to raise that lowest salary: they themselves can get 12 dollars for every single dollar they give the employee, so an extra $1000 per month for the latter translates into $144,000 extra per year for the bosses.

Another referendum, to be held at an as yet unspecified date, calls for everyone in Switzerland to receive an unconditional income of 2,500 Swiss francs ($2,800) per month from the state. That initiative, though it may have many great - liberating - consequences, will probably not make it, because it makes people think that it induces laziness.

The Swiss are not the only people considering a basic income rather than a minimum wage (Beppe Grillo wants it in Italy), and it's a bit of a shame that no-one actually tries it for their country, just so we can see what happens. For one thing, those who want to see a smaller government apparatus should jump on the basic income idea; much of what governments do these days is linked to all sorts of benefit programs, and these could disappear almost entirely. Isn't it just absolutely hilarious in that light to realize that those most opposed to big government are also most opposed to a basic income? Talk about having your cake and eating it too.....

2500 a month would be a great but how could that possibly work? It would require a lot of money printing. that's 2.5 billion a month for every million people. Sounds crazy unless it was based on a publically owned industry like in the UAE.

As to whether it should be basic income is another discussion. I personally believe everyone is entitled to full medical care and that health insurance should be illegal. I also believe that the minimum monthly social security payment should be at least $2,500 per person without deductions for health care or taxes. Why should a mother who spent her life raising children only get a few hundred a month to live on when she's old?

Aside from eliminating poverty among seniors, who would pump all this money directly back into the economy, older people would be able to retire, opening up jobs for young people.

They already have in many places. Gentrification in SF is out of control. People are moving to Oakland and Hayward suburbs because they cant afford the city. - it's worse here than in NY, the rich overpaid techies have turned SF into a rich enclave - people are getting evicted at ever increasing rates

I feel like the $15 per hour minimum wage idea is starting to gain some traction, but maybe that's only because I get much of my news from a Seattle alt-weekly.

I love the 1:12 ratio idea, and think taxes back at what they were in the 50s - with something like 90% for people earning a million or more - would be a great change. With those tax brackets we built an interstate highway system from scratch and went to the moon.

i saw a lot of comments (like a lot. almost all comments) when that fast food thing came out with people saying 'i don't make $15. why should you?' and i was like, maybe we could all make $15? but it seems almost everyone jumps to the idea that it's smarter to push others down instead of lift everyone (including yourself) up. that's from the internet though. boy, this thing attracts some dumb people.

I have always been a "make your own rain guy" and have done alright for myself and family, BUT I'm a little concerned about our collective future. I watched my parents struggle, both PHD's, work hard and and at the end amass a small retirement to keep them well into their 90's. Unfortunately, I'm looking down a barrel of dependency on something I can't control. I'm at the mercy of clients,economy, and government that has no concern for the little guy...having a masters does not make me special, that's why I have diversified into other fields. I was trained as a designer/architect...but the majority of my work comes from component design for design build. While I don't exactly design houses or high rises anymore or less I utelize my knowledge to fit into whatever needs to be done, always making sure the check clears before anything gets bought. I also relocated to Texas where things seem to be little more slanted in my favor. Having been here for three years and watching the bottom line grow without too much headache I am now faced with this healthcare crap being shoved down my throat...my insurance letter came...$2300 increase!!!! And we're a family in our young 40's with three kids...who are healthy and rarely use it. I believe in universal healthcare, I believe in healthy cities, but something is wrong...I have a hard time telling my kids to study hard and get a degree and you will be fine.....I have great kids and wife...but I see a bleak future and it's getting harder to look them in the eyes and tell them it will be ok. Thanks Donna, I love your insights....I still think I can change the world through good design, but post like these are sobering to say the least.

Their premiums went up toasteroven, like I said I believe in it, but I find it hard to believe that fair and equitable is being applied across the board....especially since Donnas original post has to do with wages not keeping up with cost of living....the fact is if you were in my situation you would be a little concerned with $2300 increase when we were told we could keep our doctors and insurance if we wanted to....that's not the point though....it's about that the American public is being slowly flushed. Agree or disagree I could care less, I'm living it and that is my reality

do you know if that could be a texas thing? your governor was kind of fighting to make it fail, and didn't the koch's pay for advertisements in you neck of the woods to get young people to not join the exchange and pay the penalty instead? i haven't really looked into the statistics much, and would probably consider them rigged if i did read them anyway.

part of the bill was to expand medicaid, which would cost states money. the federal government was going to give states money to offset that, but that's the bit the supreme court took out. that created a donut hole of sorts for states that opted out, where the poor are covered by medicaid, and most of the middle class was covered by other provisions of the bill, but some people in the middle get screwed because the state chose not to take the money. there is a possibility i'm way off on that, but it sounds familiar to me. maybe that's part of why your bill went up?

also, for the 2,300 increase, are you getting comparable coverage? i assume that increase isn't consistent with the 3%-6% typical increase insurance costs were already going up every year.

On further thought I like the idea of guaranteed income. Eliminate poverty and starvation at the very least. This would aslo reduce or eliminate entirely those horribly inefficient and insufficient programs that are supposed to "correct" these conditions, food stamps, TANF, unemployment insurance, etc. with commensurate "savings" (a word I hate when used in the context of spending on the public).

I'm in Texas, and my BCBS insurance that covers me, my husband, and our 5 year old son only went up 15$ a month, so.....180$ a year? We used to pay 453$.

I haven't checked all the coverage things, but it will be nice to have maternity care should I need it. Private insurance used to not be able to give it.

On that minimum income idea: I think you'd still have poverty because some would still make poor choices, but then it would be obvious that they're poor because they chose to spend their money on unwise things.

Actually, if you focus on the unwise things, they are generally good for local economic development:

Cigarettes and tobacco turn individuals into regular convenience store shoppers who are more likely to impulse buy on food and drinks.

Alcoholics provide substantial amounts local and state tax revenue as well as contribute greatly to "vibrancy" of the local culture scene. Since most professions involving the sale and consumption of alcohol are tip-based, they tend to generate jobs that pay livable wages.

And we've barely just covered the numerous industries catering to "unwise spending." One could reasonably throw in cosmetics, fitness, a plethora of hobbies (sporting goods, guns, crafting) and dining out as excessive spending.

The problem with casting judgement on hyperconsumers is that there's this expectation of American society that one must spend their money "reasonably" on transportation, investment and healthcare. But if we look at the broad overall economy, these sectors are primarily wealth hoarders.

So, why should anyone be denied carnal pleasures in life and forced to spend upwards of 50% of their income on driving a car and going to the doctor? Particularly, most "unwise spending" isn't exactly conducive (read: DUIs) with the operation of heavy machinery. Especially when there's a growing body of evidence that the more one drives, the more one frequently needs healthcare?

"Responsible spending" just smacks of "spend all your money on driving, buying useless appliances, get suckered into a mortgage and then pat yourself on the back because the only thing you have is supposed moral superiority? If having almost no fun and literally no joy in life is "responsible," it's likely one will never find a "cure for poverty" unless we're completely honest about the condition of humanity and start budgeting vices into livability calculations.

James, I was thinking more along the lines of minimum income would be just enough to pay for staple food, low-end rent, and a bit extra for transportation of some sort. Just enough to survive, essentially. If you want more, get a better job? So it's similar to all the programs we have now, but all consolidated and harder to cheat the system.

To many poor people, yes. Yes, they are. That's essentially the problem Sarah is that is essentially "institutionalization." Perhaps, I'm being cynical about the ability of individuals to exercise self-control but abuse is likely to happen in any poverty program. If you account for "bad behavior," budgets suddenly become more realistic on both the government and beneficent side.

I'd actually argue to eliminate food stamps from conventional supermarkets for staple foods altogether. They're excessively wasteful. When one can use food stamps to buy soda and canned gravy, this clearly a broken system. In addition, there's a growing black market for reselling packaged foods to get quick cash. Fast-food and fast-casual establishments are much more efficient at delivering fresh and balanced food. But if you proposed the idea of letting people receive three hot meals a day from McDonald's, Chipotle, Panera or Wendy's ... people would be up in arms over the notion that poor people should be allowed to each freely from such establishments. A deluxe cheeseburger will, more or less, always be a better balanced meal than 90% of what's available and affordable in a grocery store.

Even if you add a measly $80 a month in cash for pot, smokes, bum wine, happy hours or whatever else, it gives the poor an incredible amount of freedom to do things that aren't hanging around low-income housing and living an otherwise depressing existence.

If we had more livable cities where automobile, including bus mass transit— let's be honest, no one likes riding a bus—, was purely optional, you'd naturally have between $150-300 extra a month in spending cash. Eight dollar an hour jobs suddenly become attractive and sustainable and the poor can afford all the booze and smokes or healthcare they want.

Nov 15, 13 10:47 am

Assuming I'm familiar with the routes, I'd mush rather ride a bus than drive a car. On the bus I can at least read, study the buildings that I pass or even just daydream. But driving leaves me a slave to the car. Chaffeured automobilles, of course are different matter. I much like those.

As for the poor, Ithink Sara was talking more about the skid row types who will find a way to destroy their lives no matter what. Some people can't help but be herain addicts, gutter dwelling alcoholicks and what nots. Some would even choose life a poverty as sort of philosophical desire or resistance, just think of diogenes giving up his single wooden bowl.

the great apeal of basic income is that it would allow necessities to be covered and citizens would be free to choose how to use their time best. One could chose to work for wages (some do appreciate this simple arrangement). Others might opt to focus energy on a business or craft, persisting even through failure because of the basic income. Some might choose to do nothing, couch vegetables and all that. Some would even choose to embark on internships (unpaid!) to learn more & gain essential experience. Likewise, business owners could take more risk in hiring because of the expanded market for free, inquisitive labor.

I'm sure there are negatives too. Obviously difficulty is the power elites desire to inflate, making themselves wealthier (while poor gett poorer). Could that greed ever be rained in???

I think the federal reserve narrative is overstated, and influence of the baby boomer generation is understated. They are the main driver of income disparity as they tend to be wealthier at the the end of their career (and there is more of them). If you track this generation in phases, education, homes, children's education, pensions, and now retirement, it is no coincidence that these are/have been affordable for them. by sheer number they moved the political pendulum in their favor. case in point: the AARP is the largest lobby in America right now.

The federal reseve narrative is not overstated. Some think that Greenspan & company are blundering idiots but illargi at theautomaticearth makes an excellent argument that their actions are intentional while their words are used ot confuse. Read up on it heare Deflation, stocke market crash then Christmas.

The bigger question is why? Why would the Fed drive america into the ground?

^ Miles Jaffe, if you look at the federal budget, nearly half goes to medicare and social security (whether or not it should is besides the point). In total dollars, PER YEAR this is larger than any bank bail out ever, and these two things stand 0 political chance of changing as long as the baby boomers are in retirement, and as evidence of traction, see how this changes as this generation passes on. Do you expect to have full social security benefits when you retire?

Also, I think people who dump on the fed generally don't offer much in terms of alternatives to monetary policy. Try living with 20% annual inflation and see which is worse.

Ok the Poor people need more money idea is slightly flawed, The benefits don’t gradually decline as you get a job and earn your way out of poverty, there is no ramp just a cliff that you have to hope the job you get is going to last because if you make too much you are off food stamps, kicked out of public housing and ineligible for Medicare. To get back on these benefits if your Wal-Mart job evaporates after the holiday season can take years. So building a ramp and a universal safety net or minimum benefit amount is a good idea but we need to look for a real and fair way to incentivize people to move up the income ladder and take risk get a job or a better one and lift themselves up. If you have failed to notice the welfare rolls have declined conversely proportional to the numbers of permanently disabled people has risen, regaining a disability standing is next to impossible if you get a job and work, thus we have many people stuck in poverty dependent on government assistance.

On the Global economic front I think we need tariffs, countries that manufacture goods outside of the US and pay less than 50% of our mean wages should have a tax on their exports to the US to equalize the market. We are the global market for the stuff manufactured around the world China and other exporters have no other market than us so we should set the terms. We should also stop the free trade agreements Obama is negotiating in secret, if it is negotiated in secret then it is only good for the top 1% of the US not the rest of us.

^ Tempting… Meet me in the back alley by the dumpster and we can talk business.

Peter, if that idea were put into practice, then corporations would pass on that tax burden to both the consumers (by raising prices) and to the extremely low-paid producers (by paying them less, working them more, and cutting jobs) as they do with any other increase in the cost-of-business. In regards to dealing with poverty, or more particularly the income gap, Switzerland has a pretty great idea with the 1:12 ratio between executives' salaries and the wages of the lowest paid employees of a company. If an executive wants a pay raise, he/she must first pay the "workers" more. But of course, this would never happen in the US.

Our tax structure used to deeply penalize employers such that it made sense to pay their workers more. A move (similar to Switzerland et al) to limit disparity between highest and lowest wages in any corporation would also help.

It's not impossible from a policy standpoint, but IMO the only way to make it possible is a groundswell of demand from a public opinion standpoint. Over the last 20 years it has become less acceptable for large corporations to pollute the environment, we've come down harder (at least tried to) on American companies benefiting from child labor in other countries, etc. I'm starting to see more pressure to embarrass companies - like Walmart - for paying employees so little that the employee *also* has to apply for welfare benefits: using public social safety nets to keep employees' salaries unrealistically low is finally starting to come under fire, and a lot of it is through public shaming of poor corporate practice.

But until we also publicly shame people for being too rich, and it becomes a public relations liability for a quarterback to drop six figures on a night out with his pals at a nightclub or for a company's CEO to spend $90million on a penthouse, we won't see a move towards income fairness. Which is why I'm so conflicted about fucking Kanye West's visit to GSD. Celebrities skew the sense of economic fairness so obscenely it turns my stomach.

In every country I can think of, the sovereignty and wealth of the Nation, which was once the embodiment of the power and will of the people, is being butchered and sold to the highest bidder. Everywhere, the Nation and the people within it, are under attack. Not from without by terrorists but from within. Because in every country the people who run the State have largely decided they no longer wish to serve the people but prefer instead to serve the interests of a Global Over-Class.

...

I think that great ideal of government by and for the people is being butchered – for profit. The Nation-State is dying, because any given arrangement of power can be corrupted and will be, by those who benefit from it most – those who hold its powers – in this case the powers of the State - IF people cringingly let them. And that it what we are doing.

...

Behind the national name plate a largely unseen machinery will be almost entirely corporate. Both sides will be there to seek advantage, not for you the people, not for the nations whose flags they use as camouflage , but for the corporations who pay them. The US delegation will seek advantage for US based global corporations and the EU delegation will seek advanage for EU based global corporations. Both sides will be hailed victorious. The real question – very carefully never ever raised by the compliant media – will be who lost? And the answer, studiously unreported, will be the ordinary people of both sides.

...

The world is changing, a new order of things is taking shape around us but we are loathed to see it because we insist on trying to see everything through the lens of the previous world order.

...

Both [existing left & right] sides seems only able to see things in terms of the labels and world view they are used to and as a consequence see nearly nothing at all. The truth, I suggest, is that we are at a moment when an entire cultural form is ending. At such times it is not one part or another, government or market, which corrupts and breaks, which betrays the values it was meant to embody and ceases to do the job for which it was created, it is all parts at once. All parts of our society have become corrupted.

We must move beyond the politics of the last century, seeking to blame all ills on a corrupt and captured State or alternatively on a corrupt, captured and rigged market. BOTH are true. Both are corrupt. Neither is working for us. A new elite exists in every nation, has control over every State but which has no loyalty to the Nation of people in which it exists any more than a tape worm is loyal to the creature in whose body it feeds and grows.

The New World Order has its own ideology which does not fit happily on the old left to right axis.

The new ideology is not fully formed yet, but already it is clear that it is not Libertarian because unlike Libertarianism, the new ideology believes the State should be very powerful and large and should intervene. But neither is it Socialist, because unlike the Left the new ideology believes those interventions should be on behalf of the wealthy not the poor.

"Naturally, this is orders of magnitude greater than the already debatable ratio of CEO compensation, which was $20.7 million in 2012, or about 305 times more than the average Walmart manager, and 836 more than the take home of the median Walmart worker."

Maybe it is one of reason why so many businessmen tend to do trade in the developing country. As i know that there are so many businessmen like to choose the China. Finding the partner or supplier is more and more popularity. However, it also is hard work for every businessman.

Miles Jaffe ^ My point is neither liberal nor conservative, but addresses the fact that the average retiree today will receive $325k more than what he/she paid into the system, where the child not yet born will pay $450k more than he/she receives. Monetary policy (the fed) and fiscal policy (congress) are just the vehicles for this gross intergenerational inequity. This has taken place over the past 30-40 years and explains our current income disparity.